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01/30/2025
Growth in Texas manufacturing picks up pace in January; outlooks improve further
Federal Reserve Bank of Dallas | Jan. 27, 2025
Growth in Texas manufacturing picks up pace in January; outlooks improve further
For this month’s survey, Texas business executives were asked supplemental questions on the labor market, federal government policies and financial conditions. Results for these questions from the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey have been released together. Read the special questions results.
This month’s data release also includes annual seasonal factor revisions. Once per year, the Federal Reserve Bank of Dallas revises the historical data for the Texas Manufacturing Outlook Survey after calculating new seasonal adjustment factors. Annual seasonal revisions result in slight changes in the seasonally adjusted series. Read more information on seasonal adjustment.
Texas factory activity picked up notably in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose seven points to 12.2.
Other measures of manufacturing activity also moved higher this month. The new orders index rose six points to 7.7, its highest level since April 2022. The capacity utilization and shipments indexes moved up to 5.0 and 8.7, respectively, after near-zero readings in December.
Perceptions of broader business conditions continued to improve in January. The general business activity index jumped 10 points to 14.1, its highest reading since October 2021. The company outlook index increased to 18.7, also a multiyear high. The outlook uncertainty index remained near zero, indicating uncertainty is neither rising nor falling.
Labor market measures suggested employment and workweek length grew slightly this month. The employment index inched up two points to 2.2. Fourteen percent of firms noted net hiring, while 12 percent noted net layoffs. The hours worked index edged up to 1.9 from -0.5.
Upward pressure on prices and wages increased this month. The raw materials prices index rose five points to 17.5, and the finished goods prices index rose nine points to 6.2. The wages and benefits index ticked up to 20.9.
Expectations are for increased manufacturing activity six months from now. The future production index pushed up to 44.8 from 34.1. The future general business activity index rose to 35.5 from 20.6. Most other indexes of future manufacturing activity also pushed higher this month.
Next release: Monday, February 24
Data were collected Jan. 14–22, and 83 of the 122 Texas manufacturers surveyed submitted a response. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.
Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.
